About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Testing Innovation in the Real World

This report looks at how innovation testbeds are being used to safely test out innovation and new technologies in the real world.

Testing out how new ideas and technologies work in practice is critical to making sure that they are both fit for purpose and safe before they reach a wide audience. Scientists, businesses and, increasingly, governments, look to test innovative products and services before they enter our homes and cities, or are applied to our public services.

This experimental approach to testing innovation is an opportunity to make innovation safer whilst maximising the real-world positive impact. It offers a way of finding out how new ideas and technologies can be applied to solve society’s biggest challenges, such as climate change, healthy ageing and inequality. It should also provide a setting for establishing how governments, businesses and citizens can all benefit from innovation.

This report focuses on testing environments that are both bounded and in real-world settings. We term these 'real-world testbeds' and set out to learn more about how they are being used across the world.

Our research shows that developing real-world testbeds can help people and places to:

  • Strengthen collaboration within a clear and structured framework between the public sector, business, universities and other research-intensive organisations.
  • Focus investment in innovation in specific technologies, sectors and research areas where the local area is seeking to develop and strengthen a competitive advantage.
  • Reduce risk in the process of developing new products and processes for firms, providing a safe space for them to iterate, fail, influence regulatory and policy change and support them to develop to an investment-ready stage.
  • Promote the local area as a good place to invest and develop knowledge-intensive functions, giving potential investors and existing firms in the area confidence that there is a supportive and enlightened local innovation ecosystem.
  • Improve the delivery of (or reduce the demand for) public services by creating the right policy, governance and regulatory systems.
  • Maximise the economic potential and value of research done locally, and of other assets such as public-sector data.
  • Make better use of publicly-available infrastructure.
  • Provide a framework for innovation policy that enables effective evaluation.


To take advantage of the opportunity that real-world testbeds can bring, our recommendations from this research are as follows.

  • Real-world testbeds are an important policy tool that can increase innovation and achieve the aims of national and local industrial strategies. Our research shows that they can play multiple roles for national and local government, set out in the use cases in this report.
  • Governments should experiment with applying real-world testbeds as a tool for solving grand societal challenges. Real-world testbeds offer an opportunity to incentivise and coordinate key stakeholders across public, private to work together in directing their efforts at solving challenges. This use of real-world testbeds is currently underrepresented in our research.
  • Public engagement should be central to the design of testbeds and considered from the start. A framework for how the public will be engaged and involved should be set out from the start of the design phase of a real-world testbed. Real-world testbeds can raise significant ethical questions, including those around the type of technologies that are tested and the consent of those who are in the testing environment.
  • Governments should compile a national overview of the infrastructure available to test and demonstrate innovation. As demonstrated in our example from Sweden, this would allow these tools to be marketed and help coordinate resources and learning from them.
  • Relevant governmental and/or innovation agencies should agree on a shared terminology for testing and demonstration tools as confused terminology prevents learning. Our research aims to provide a basis for a shared terminology.
  • Real-world testbeds should not be stand-alone policies, but part of a strategic approach. The best examples from our research embed the testbed in a wider strategy based on research strengths.
  • Evaluation and learning should be considered from the start of real-world testbed design, to understand the impact of the innovation being tested, but also the process of testing. Evaluation is too often an afterthought rather than a core aspect of the testbed design, leading to the loss of important learning and evidence. Our report highlights several examples of approaches that could be taken.

For more examples of real-world testbeds that are being used across the globe, see this interactive map.


Jen Rae

Jen Rae

Jen Rae

Head of UK Innovation Policy

Jen Rae was a policy advisor on innovation and economic growth for Nesta’s Policy and Research team.

View profile

Siri Arntzen

Siri is an Economist in Arup’s City Economics and Planning team in London. She specialises in economic development, place-making and innovation research and policy.

Zach Wilcox

Zach is an Associate in Arup’s City Economics and Planning team in London. He specialises in economic development strategy and local government funding and finance policies in cities.

Neil Lee

Neil is an Associate Professor in Economic Geography at the London School of Economics. HIs work focuses on economic development, innovation policy, and inclusive growth.

Catherine Hadfield

Catherine is a consultant based in Arup’s Planning, Policy and Economics team in the North West and Yorkshire. She specialises in economic development, strategy and stakeholder engagem…